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It seems to be the case that partners and customers are usingCRM4.0 as a development platform, but I don't really hear Microsoft talking about having a platform as a service like Salesforce.com does. What's the deal with 4.0 as aPAAS?

What we're doing is seeing a lot of customers and partners building xRM applications, which are using the CRM platform to build non-CRM stuff. So for instance, ING built a vendor relationship management system on CRM. It's not CRM; it's kind of VRM.

We've got the U.S. Air Force [using] us for their task management platform to manage tasks for all their service personnel in Europe. The U.S. Department of Agriculture uses us for conservation management.

Further reading

I was in New Zealand last week, and we have some customers there using us ... for the blind matching service to track dogs, pet owners and training programs. It's a very noble thing, but it's not CRM. It's sort of DRM. It's the sort of thing we are seeing a lot of.

So there are a lot of people who look at the core platform and say the platform is extremely configurable and very, very flexible, and they're building other kinds of categories beyond CRM.

Some people buy it for the core sales, service and marketing, but some people say, "You know what? I also want to go ahead and build other things." Some of our partners have built project management and accounting on CRM. They use CRM for leads and opportunities and build project objects and consulting objects and work plans. ... You just create the entities and workflows, and off you go. So we are seeing a lot of that where people are using us as a flexible work platform.

IsPAASa goal?

It's been a goal of ours to create a platform that enables rapid development in the CRM space. We weren't so much targeting non-CRM scenarios, but we certainly recognized about 18 months ago-and now our partners and customers have clearly caught on to it.

And we decided to go ahead and talk about xRM, and xRM means any kind of relationship management. At its core what we're really good at is defining entities and its relationship across entities and planning workflow and tasks and flowing all that stuff automatically through Office and Outlook or through a browser or a portal.

So it's like what the U.S. Air Force is doing. They just use us to define their work types, define their workflow, drop it through Office and Outlook, drop it through a browser, and spit it out to thousands of people.

What about the 4.0 platform makes it extendible as an on-demand platform?

The configuration model is fairly consistent. There are new things in there like support for many-to-many relationships, which allow you to model more complex scenarios in the system than you could in 3.0. So you can literally define and build richer data models that can support different kinds of businesses.

We moved to Windows Workflow in 4.0, from our custom workflow model in 3.0. What we're proudest of in the transition is we changed our entire workflow engine and maintained perfect upgradeability because in our model we define workflow definitions in meta data and the workflow state goes in the database, so we're able to take a workflow service out, toss it away, put it in Windows Workflow and simply keep it going because they were functionally equivalent. It's like changing the water pump in your car.

That's what SOA [service-oriented architecture] was supposed to be about. You can change a service like the water pump on your car. So we did that to maintain perfect upgradeability. That's a big thing. Windows Workflow, many-to-many relationships, multitenancy is a big deal for us in that area. If you want to offer an on-demand platform, we can easily scale out in an economical hardware fashion by using multitenancy. It's what's in Live by the way, of course. So making it available in that kind of model is a big deal.